FUD is an acronym for “Fear, Uncertainty and Doubt” and describes a tactic used in marketing, sales, PR or politics that is often used to cast a shadow over a competitor’s product when your own is unable to compete or to influence public opinion. In business it is often used by large companies with large market share. 1)
Gene Amdahl first freely defined this acronym after he left IBM to found his own company, Amdahl Corp., with the following statement: “FUD is the fear, uncertainty, and doubt that IBM sales people instill in the minds of potential customers who might be considering Amdahl products.” The idea was to persuade customers to go and stay with safe IBM gear rather than with competitors’ equipment.2)
The aim of this strategy is to make customers afraid of adopting a rivalry product by creating doubts about its future.3) Feelings of fear are often irrational and can - similar as false information - lead to uncertainty. FUD-Strategy takes advantage of this human mechanism in order to influence people and their buying decision process. It is a kind of propaganda tactic that can be described with the latin saying “audacter calumniare, semper aliquid haeret” (slender boldly, something always sticks).
It is for example an important factor in the high-tech industry. Since high-tech solutions are frequently innovative in nature, the buyer is often considering the purchase of a product that has not been tried before, which means that uncertainty plays an important role.4) Large or already well known companies might use this situation to weaken (smaller) competitors with new products by spreading vague or negative information. Thus, (small) companies in high-tech industry have to put even more effort in identifying, targeting and gaining customers' interest in order to successfully launch new products. The bigger the customer is (private persons up to companies) and therefore more people get involved in the decision, the more complex the launching process will be. Decision makers in companies often rely on public information since they are not that much in detail and rather buy products from a well known brand instead of a new or smaller brand.
Although once it was attributed to IBM, Microsoft soon picked up the FUD-strategy from IBM and used it as a primary marketing tool.
SCO: The SCO Group, Inc. (Santa Cruz Operation) is a software company with focus to Unix. In 2003, SCO sued IBM claiming intellectual property infringements. IBM called this FUD; the court found SCO’s arguments unpersuasive and inexcusable.7)
Nowadays FUD is used more and more in politics when one side is accusing the other to use FUD in order to obscure issues.